El Niño years can exacerbate supply chain woes on the maritime sector with droughts and heavy … [+]
Managing supply chains during the holidays is always stressful and tests the boundaries of transportation systems. But it becomes even more challenging when the influx of shipping needs is combined with time-sensitive holiday deliveries and the potential for hazardous winter weather. With the looming presence of a strong and potentially historically intense El Niño the possibility of weather affecting the availability of goods and the cost of holiday purchases increases as shipping, aviation, and over-the-road transportation navigate the weather to make the holidays bright.
The Unpredictable Nature of El Niño
El Niño events are notoriously challenging to forecast, making it difficult for businesses to prepare far in advance. The phenomenon disrupts normal weather patterns, leading to extreme conditions such as snow, ice, floods, droughts, and other storms. For U.S. businesses, the Climate Prediction Center has a seasonal outlook, updated monthly, that provides additional insights into forecast changes.
Since the impacts of one bad weather event can cause a cascading effect on the entire supply chain, businesses and transportation companies that are more sensitive to weather impacts typically rely on enterprise meteorologists and weather-risk communicators. These experts can tailor real-time forecasts and insights dependent on geography, industry, and modes of transportation. With enough advance notice, some deliveries or routes can be modified to take into account potential significant delays.
Maritime Shipping
Winter in the northern hemisphere is already tough for container ships. Winter storms, freezing spray and strong waves that can cause parametric rolling are common during November through February. These events can potentially delay deliveries or, worse, toppling cargo into the sea.
El Niño years can exacerbate supply chain woes on the maritime sector with droughts and heavy precipitation in different parts of the world. For example, canals already struggling with low water levels, little to no precipitation may cause authorities to restrict shipping lanes.
A recent example of this is the Panama Canal. Lake Gatun is an artificial freshwater lake in Panama and is an integral part of the Panama Canal system. The lake’s low water level has prompted authorities to reduce vessel traffic by more than 40% by February. Still, as a significant corridor for container ships, shipping companies must get creative in keeping on schedule and distributing loads across multiple ships to stay underweight and depth limits, and even taking longer routes around the tip of South America.
Aviation
El Niño weather patterns typically influence the jet stream, and on top of winter’s stronger jet streams, it can either help or hinder a plane’s speed and fuel consumption.
On the ground, airport operations teams proactively watch for weather conditions that could cause delays, including snow, ice and high winds. El Nino may be more of a concern for the southern U.S. this holiday season as it typically brings wetter and colder weather to the region, and frequently causes icy transition zones in addition to possible severe weather. The northern half of the U.S. is expected to experience drier and warmer conditions, but Arctic swings will still bring plenty of chances for winter storms.
While turbulence doesn’t directly impact the supply chain, it can affect a different type of holiday delivery. New research connects El Niño to 50% more moderate-or-greater clear-air turbulence (CAT) over parts of the US and North Atlantic. CAT can cause an aircraft to drop hundreds of feet and send items flying through the cabin, potentially injuring anyone on board. Since 2009, data has reported nearly 150 serious injuries to both passengers and crew because of turbulence, and the cost of turbulence has economic implications, too, resulting in an estimated $500 million each year in damage and delays.
Over-the-road Transportation
Weather-related delays cost the freight industry up to $9 billion every year, according to the Federal Highway Administration. The good news is that U.S.-based parcel companies are well prepared to anticipate weather events and make decisions based on advanced weather intelligence. Several transportation companies have meteorology teams or hire enterprise weather companies to work closely with administrators, dispatchers, and other staff to help keep drivers safe, avoid potential disruptions and keep deliveries on schedule.
As the holiday season unfolds, businesses should remain vigilant in monitoring the evolving impact of El Niño on supply chains. It creates uncertainty and challenges, but proactive measures can be taken to minimize disruptions and ensure a smoother flow of goods and services. By making informed decisions using real-time weather insights, industries along the supply chain can navigate the impact of El Niño and deliver a festive season that meets the expectations of both retailers and consumers alike.
